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New debt of $105M? ‘Manning-up’ not enough

Maury County Commissioner Andy Jackson’s challenge to the commission to “man-up” and approve the proposed $105 million capital plan for a new Justice Center, Central High School, Interstate 65 Industrial Park; including expenditures of $9.1 for school athletic facilities and $1.5 million for a new 50,000-square-foot speculative building at Cherry Glen needs more public discussion.

I would agree with Commissioner Jackson that the majority on Maury County citizens are indeed “smart enough” to know what’s needed and what’s not needed when it comes to taxpayers funding this 24 year $105 million bond issue. If Commissioner Jackson really believes what he said, then he should propose that each of these proposed capital expenditures be approved by the voters.

Mr. Jackson’s assertion that the proposed new high school and justice center “are going to last 75 to 100 years” is unrealistic. The current Columbia Central High School facilities’ useful life service has been only about one-half of this time. Realistically, any new high school facility constructed today will likely need replacing in about 35 to 40 years.To get 75 to 100 years out of a new high school would require such design and material cost as was demonstrated on our 106-year-old courthouse and would likely double the current projected $50 million in cost.

Speaking of the courthouse and the proposed new $45 million “Justice Center,” it would be beneficial for Mr. Jackson to explain why the Maury County Building Committee has not given serious consideration to the federal government’s proposal to donate the current federal courthouse on the corner of 8th and Garden streets to Maury County for use as a county courthouse. This building is made of the granite and was built about 60 years ago but still has 25 to 40 years more useful service. By accepting this gift, we could relieve the current overcrowding in our historic courthouse and defer the borrowing of $45 million and accumulated interest over 24 years to a later date.

Commissioner Jackson apparently is an economic optimist and believes that the local economy will improve so much that future revenue increases in county sales taxes and appreciating property taxes will pay for this loan. But, there are other possible economic outcomes. In this case, feminine fiscal common sense and due diligence may be more in order, rather than “manning-up.”

The recent Tennessee Comptroller Report said that since 2007 Tennessee’s 95 counties have spent more money than they took in. In fiscal year 2011-12, the state’s 95 counties collected $11.6 billion in revenue, but spent $12.1 billion. This report also says, that total county debt has increased by $1.41 billion since 2007.

According to the report, Tennessee counties have thus far avoided bankruptcies because of the economic downturn, but “concerns remain.” The comptroller says longterm county debt and liabilities continue to grow at a double-digit rate for post-employment benefits, such as health care, and new accounting standards require the recognition of significant longterm pension costs. As of June 2011, only 21 counties had functioning audit committees despite the comptroller’s prudent recommendations, and new federal and state mandates are forcing counties to fund additional services in education, social services, healthcare and public safety that must be taken into account before borrowing an additional $105 million.

If that’s not enough, Gov. Haslam has asked all state department heads to cut their 2013-14 budgets by another 5 percent, as federal funding to the state will likely dry up. In fact, a recent national report says Tennessee is one of the top five states to be hit hardest by expected federal budget cuts because 7.7 percent of our state budget comes from the federal dollars. Fewer dollars in the state dollars means fewer dollars in the county budget.

Of course there are no guarantees when it comes to economic direction, as has been demonstrated in the past. We need to be prudent in our deliberations and our financial forecasts, when considering the doubling the public debt. To pay for this $105 million loan, Mr. Jackson proposes to raise the property tax rate $.20 per $100 or about 8 percent, and divert some of the current county wheel tax to the debt retirement. This means that the Maury County Road Commission and/or Sheriff’s Department budget will be reduced, and that means less law enforcement and fewer road repairs, less bridge repair and reduced new road construction. How much is diverted and who takes the financial hit has not been discussed in public as of yet.

According to the Stephens Inc. presentation to the County Commission, Maury County taxpayers are currently obligated to over $106 million in debt; $75 million in general government and school debt; $24 million in Maury Regional hospital debt, and $8 million in public utilities water system debt. This proposal would increase the Maury County taxpayer’s debt to $211 million in total debt. The principle and interest on a debt of this size limits Maury County’s future options and will likely limit our ability to provide future pay increases to our county employees and teachers. It also limits our ability to decide on future growth and burdens our children to years of debt and likely future tax increases.

We all need to understand what this decision means, and we need to let the taxpayers approve of a decision of this magnitude.

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